viewCache Inc

Cache widens loss, Q2 profit outlook misses estimates


Specialty retailer Cache (NASDAQ:CACH) widened its fiscal first-quarter loss, despite posting revenue growth and also reported a second-quarter earnings outlook that missed analyst views. 

The company, which has its headquarters based in New York, sells everything from dresses to tops, denim jeans and accessories for women.

Cache’s net loss widened to $1.2 million, or nine cents per diluted share, in contrast to a net loss of $772,000, or six cents per diluted share.

For the January-March period, revenue was $55.9 million, up from the $52 million a year-ago.

On average, analysts polled by Bloomberg expected a loss of nine cents a share, on revenue of $54.6 million. 

Same-store sales jumped 9.4 percent, compared to an increase of 7.7 percent in the same period in 2011.

This is considered to be a key metric to assess a retailer’s financial health as it excludes sales from locations recently opened or closed during the year.

"Our positive momentum from 2011 continued into the first quarter as reflected by our 9.4 percent increase in first quarter comparable store sales," chief executive Thomas Reinckens said in a release.

"However, we have seen a slow start to second quarter with April comparable store sales increasing three percent, which has caused us to moderate our first half outlook."

In the latest quarter, the retailer opened one new store and closed 12 stores, lifting its total count to 266 locations.

The store closings had negative profitability in 2011 and their closures are expected to have a positive impact on fiscal 2012 earnings, the company added.

Higher marketing and e-commerce costs drove the retailer’s operating loss up to $2 million from the $1.3 million, a year-previously.

Gross margins eased to 39.6 percent from 42.1 percent, mainly due to increased markdowns tied to earlier transition to spring merchandise.

Looking ahead, the company foresees revenue from established stores to rise in the low to mid single digit range, in the second-quarter.

It also predicted per share earnings of between 19 to 22 cents, just shy of analysts’ estimates for 24 cents a share.

Shares of the company lost 57 cents, or 11.13 percent, descending to $4.55 each on the Nasdaq on Friday.

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